Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 357,000 $ 46,500 1 38,000 23,300 2 58,000 21,300 3 58,000 18,800 4 433,000 13,900 Whichever project you choose, if any, you require a 14 percent return on your investment. a-1

What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Payback period Project A years

Project B years a

2 If you apply the payback criterion, which investment will you choose?

Project A Project

B b-1

What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Discounted payback period

Project A years

Project B years

b-2 If you apply the discounted payback criterion, which investment will you choose?

Project A

Project B c-1

What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

NPV Project A $

Project B $

c-2 If you apply the NPV criterion, which investment will you choose?

Project A

Project B

d-1 What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

IRR Project A %

Project B %

d-2 If you apply the IRR criterion, which investment will you choose?

Project A

Project B

e-1 What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

Profitability index Project A

Project B

e-2 If you apply the profitability index criterion, which investment will you choose? Project A Project B f. Based on your answers in (a) through (e), which project will you finally choose?